CHINA may allow local governments to issue about 10 percent more special bonds in 2020 to help support economic growth, a senior government economist said, a smaller increase than some analysts had been expecting.

The forecast by Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, the finance ministry’s think-tank, suggested local governments could be allowed to sell about 2.4 trillion yuan (US$343 billion) in special bonds to fund infrastructure projects.

“The strength of fiscal policy will not be reduced,” Liu told a group of reporters, adding that the government will make fiscal policy more effective next year.

“I expect special bonds to increase around 10 percent from 2019. There is no need for a sharp expansion,” he said.

Some analysts and policy advisers had predicted China may let local authorities sell up to 3 trillion yuan in such bonds next year.

Growth of 6 percent or slightly higher in 2020 may be expected as long as employment holds steady, said Liu.

China’s infrastructure investment could grow around 4 percent in 2020 – in line with this year, said Bai Chongen, dean of Tshinghua University’s school of economics management and a former central bank adviser.

Fixed asset investment grew 5.2 percent from the January-November period, remaining around the weakest levels in decades, official data showed.

(SD-Agencies)